“We’re exposing those who are beating up on the system to score political points,” U.S. Chamber President and CEO Tom Donohue exclaimed in a speech at the NASDAQ stock exchange in New York City:To place all the ills of the economy at the doorstep of our financial industry is not only fundamentally wrong and unfair, but it could lead to policy outcomes that would do great damage to American families, savers, retirees, and businesses.Even though “our financial system is more stable, our banks are better capitalized,” Donohue pointed out “our economic engine is sputtering.”We flatly reject the idea that 1%–2% growth is the “new normal.” It’s anything but normal—and it’s entirely unacceptable. Those in Washington who believe the best we can do now is divvy up a shrinking economic pie have got it all wrong. They are aiming way too low.The regulatory fallout from the 2008 financial crisis in the form of the Dodd-Frank law and other regulations has weighed down companies of all sizes both on Wall Street and in the rest of the U.S. economy. Donohue cited a recent Center for Capital Markets Competitiveness report that companies have seen higher costs for financial products and have passed those onto their customers. “Almost 20% said they delayed or canceled planned investments,” he noted.

Donohue exposed the “big government agenda” of the misguided populist upswell:They want to centralize all decision making in Washington, D.C. They mistakenly think they can make better decisions than the American people who rely on our financial system for a secure retirement; car, home, and student loans; or to start a business and achieve their dreams.

Sen. Warren and her friends aren’t looking out for them; they are looking to gather more power for themselves so that they can run the entire economy from Washington.

What their proposals would do is help trap us in this anemic economy, strangle small businesses and Main Street, and destroy our ability to finance America’s economic growth.

The financial industry is far from perfect, but much of today’s rhetoric is ill-informed or just plain wrong.More reactionary populism in the form of bad financial regulations “would do nothing to strengthen our capital markets or improve their stability,” said Donohue. Instead, “Business costs would go up, and financing opportunities would dry up even more than they already have.”

Instead of regulations that punish risk-taking, Donohue pressed for “smart regulation.” He described such a regulatory vision:We need a system that fosters growth-enhancing innovation and allows for legitimate risk.

It would support diverse products and services from an array of capital providers and investors. It would offer ample access to affordable credit and ensure liquidity for businesses’ daily operations.

Its regulators would have clearly defined responsibilities, enforce the rules smartly, be held accountable, and coordinate well with other agencies. Imagine being a mid-size bank or financial firm with multiple regulators giving you different guidance or instructions. It would make you want to see a psychiatrist.

Regulators would understand the markets they are regulating and not pick winners and losers among sources or types of capital.

They would make certain that our system is coordinated, complementary, and compatible with the world’s other major economies.

They would enforce rules impartially and consistently. They would focus on rooting out the genuine bad actors and stopping them before they do damage.

They would ensure that honest market participants know the rules of the road and have a level playing field.

Policymakers would understand that our system thrives on entrepreneurial risk and regulatory certainty.In the near-term, there are plenty of policy fights that must be fought. The Labor Department’s fiduciary rule should be squelched. “If it’s allowed to go forward, up to 9 million small business owners could stop providing retirement benefits to their employees,” Donohue said. In addition, the Obama administration’s attacks on arbitration clauses that only empower (and enrich) trial lawyers must be blocked.

Regulators aren’t off the hook. Donohue called for the Consumer Financial Protection Bureau to be led by a five-person commission more accountable to Congress instead of its current single director. The Federal Reserve’s financial regulatory functions deserve more transparency and accountability. And the Financial Stability Oversight Committee needs to tell companies how they can avoid getting the “systemically important financial institution” (SIFI) label and what has to be done to have it removed.

Comments by contributing authors or other sources do not necessarily reflect the position the editor, other contributing authors, sources, readers, or commenters. No contributors, or editors are paid for articles, images, cartoons, etc. While having reported on and promoting the beliefs associated with the ARRA, this blog/site is not controlled by nor funded by the ARRA. This site/blog does not advertise for money or services nor does it solicit funding for its support.

Fair Use: This site/blog may contain copyrighted material the use of which has not been specifically authorized by the copyright owner. Such material is made available to advance understanding of political, human rights, economic, democracy, and social justice issues, etc. This constitutes a 'fair use' of such copyrighted material as provided for in section Title 17 U.S.C. Section 107 of the US Copyright Law. Per said section, the material on this site/blog is distributed without profit to readers to view for the expressed purpose of viewing the included information for research, educational, or satirical purposes. Any person/entity seeking to use copyrighted material shared on this site/blog for purposes that go beyond "fair use," must obtain permission from the copyright owner.